Paper #4

Managing the Profitability Performance of the Banks: Exploring the Antecedents through Case Examination of MCB Bank

Maria Shaikh, Sumra Shaikh, Ghazala Benghal, Haseeb Haleem Shaikh and Nadeem Juman Shah

Abstract: Debt financing has been used as an instrument of filling the budget deficits both in the private and public sector. Over the years it has gained popularity and it is now a common phenomenon to find in the finical reports of most companies’ extent of debt. The contribution Advances and deposits are crucial for all banks. This research is aimed to judge impact of debt, investments, Advances, Equity, Taxes and deposits on profitability of banks. This research is aimed at identify impact of major factors on profitability of Muslim commercial bank of Pakistan (MCB) covering the period from 2011 to 2016 Secondary data was used from annual financial reports and from the website of Muslim commercial bank of Pakistan (MCB) and state bank of Pakistan. This research study is descriptive and correlative in nature. The data then analysed through multiple regression analysis in electronic views (e-views) in order to measure if there exists any relationship between bank profitability and leverage. Debt, Advances, Investment Equity and Taxes selected as independent variables and profitability as dependent variable in order to examine the effects of debt, Advances, Equity and Taxes on firm performance. The findings of the research are significant as per hypothetical relationship. The study revealed that bank advances, investments and equity has a positive effect on profitability whereas Taxes affects negatively to the profitability of MCB. The regression results show that Advances, Investments and equity which is independent variable is significant variable of profitability the dependent variable. Its significant at.000 level of significance as the p-value shows.

Keywords: Management; Debt Financing; Profitability; Firm Performance; Banks.